JD Sports hopes England can keepy-up 26% surge

JD SPORTS Fashion has forecast a fillip to sales from the World Cup – but admitted strong annual profits unveiled yesterday meant it faced "increasing challenges" from earnings comparatives.

It came as the company, seen by many as the most successful in the niche sector in recent years, posted a 26 per cent jump in profits to 67.4 million and hoisted its final dividend 65 per cent.

This compared with a 53.6m profit in the previous year. It is proposing that the final dividend for the year to end-January rises to 14.7p, making 18p for the year – a 50 per cent rise. JD Sports said the results showed its resilience "in the face of less than favourable economic conditions and exchange rates".

Sign up to our daily newsletter

The i newsletter cut through the noise

But JD, whose main rivals include Mike Ashley's Sports Direct International and JJB Sports, added: "We recognise the increasing challenges of strong comparatives and the current economic and fiscal threats to consumers' expenditure."

The company said same-floorspace sales rose 2.5 per cent in the year, but that growth had slowed to 2 per cent in the first ten weeks of its new trading year to 10 April. Profit margins in its key fashion business had improved, however, JD said.

Peter Cowgill, group chief executive, said the company had put together footwear and clothing ranges focused on the World Cup finals, being held in South Africa from 11 June. "We want to capitalise on the following and the feel-good factor," Cowgill said.

"We would be hopeful that, if England are successful, there is a movement towards sports and leisurewear. You'd have to say success is (England] getting to the semifinals."

JD trades as JD Sports, Chausport, Size, Bank and Scotts from 530 stores. In its sports division total revenue increased 10 per cent to 615.5m in the year, while like-for-like sales grew 2 per cent.

JD was particularly pleased with improved margins in the division, helping operating profits before exceptionals rise to 64.1m.

It attributed its success to stock management, its own brand strength and "competitor failures and weaknesses". JJB Sports came close to going into administrative receivership last year. Analysts said JD stood out among its struggling rivals in the economic downturn, partly due to its fashion focus rather than a dependence on replica football kit sales.

The firm's fashion brand Bank, aimed at teenagers and those in their twenties, saw operating profits before exceptional items rise to 3m from 1.2m.

JD hit the acquisition trail last year, following the Chausport deal in France with the purchase of rugby brands Canterbury and Canterbury of New Zealand as well as related distribution assets. It ended the year with net cash of 60.5m, and is interested in further deals.